Lumen Technologies (NYSE: LUMN), a Telecom company, announced the signing of a definitive agreement and is selling its Latin American network services to Stonepeak Partners, a leading private equity firm, for $2.7 billion. The sale between these two companies is expected to be completed in 2022.
Under the terms of this deal, the two companies who signed the agreement said that Lumen’s Latin American business will now operate as an independent portfolio company of Stonepeak (the New LATAM Company) with the headquarters in the U.S.
There will not be any change in the current Latin American organization and the leadership team. The team led by Lumen’s president, Mr. Hector Alonso, will remain in place. Lumen will not relinquish its global presence and will maintain a strategic relationship with the New LATAM Company. Lumen Technologies will continue to serve both the customers in the region.
According to Mr. Jeff Storey, the President, and CEO of Lumen, the transaction will allow their company to drive future growth by focusing on investments in critical areas. This deal will also allow flexibility to their capital allocation strategy.
Lumen will continue to serve its customers in (EMEA) Europe, Middle East, and Africa. APAC (Asia Pacific) and North America. The company will continue to do the same in Latin America with the partnership with New LATAM Company. This strategic relationship includes network arrangements and reciprocal reselling that will leverage each other’s extensive data centers, fiber footprints, and other network assets. For Stonepeak, the agreement provides a chance to invest in a communications platform of a Latin American region with terrestrial fiber, extensive subsea, and, data center footprint.
After the completion of the deal, customers who want services within the Latin America region will work through the strategic Lumen partnership or directly with the New LATAM Company.
Stonepeak is very committed to enterprises that operate in Latin America and the transaction will provide the New LATAM Company with enhanced ability to invest in changing market conditions and more autonomy to serve its customers in the region.